5 Ways to Rejuvenate Your Customer Loyalty Program

Customer loyalty is often seen as the Achilles heel of the retail industry, especially as consumers gravitate toward increasingly social and mobile modes of shopping and are confronted with hundreds of brands every day.

Last year, 61 percent of retailers cited customer retention as their greatest obstacle. It's easy to view e-commerce innovations as the enemy when a once-faithful customer base abandons brand loyalty in favor of the cheaper or faster option. But these challenges offer retailers opportunities to take a hard look at existing loyalty programs and business strategies to make updates that better suit the changing behaviors of their target markets. Here are five methods retailers can use to grow customer loyalty in today's digital age:

1. Reward loyal customers and social fans to create brand ambassadors. Nothing is more valuable than a loyal customer, except perhaps one that feels so appreciated that they're willing to be a vocal advocate for your brand. Today, when customers take this role, their power is exponentially more valuable than it was just a few years ago. In recent years, social media has given us the ability to get instant opinions on anything from people we trust. A brand ambassador's ability to touch many people via social networks creates huge opportunities, or risks, should your competition beat you to the punch. If a brand's customer acquisition strategy doesn't include the use of loyalty to reach the friends of its customers and fans, it's time to revisit that strategy.

2. Keep pace with evolving tools and technologies. If brands want their advocates to efficiently share their message, they need to give them the right tools. Successful social marketing relies on a brand's ability to efficiently encourage dialogue between its customers and their close social circles. Comments, likes and shares among these cohesive networks are critical, and brands that don't add the right tools are less likely to succeed.

Brands that harness their advocates and give them the tools to generate authentic, positive interactions and responses from consumers on social media can see enormous returns on investment. For example, Regal Cinemas recently ran a Mother's Day promotion on Facebook powered by eGifter and saw 50 percent of participants share the special offer with their social networks, resulting in exponential additional brand exposure.

3. Become a natural part of the social and mobile experience. New tools are great, but not all tools are created equal. Your strategies should create an easy and natural extension of your customers’ social and mobile routines. Consumers in the digital age spend much of their time on their smartphones, social media and, increasingly, on both simultaneously, challenging marketers to stitch their loyalty programs into the natural stream of social and mobile activity.

Many businesses are still working on getting it right. Starbucks made social commerce headlines with its "Tweet a Coffee" campaign, which was tied directly to its mobile-friendly loyalty program. However, many similar campaigns require too much effort on the part of the shopper — clicking out of the social page and into an e-commerce site — or place too much emphasis on deal-seeking, contests or other time-consuming activities. Ensuring a brand's experience aligns seamlessly with the things a customer would normally do on social media (e.g., sending a message or liking a photo) can lead to more frequent, authentic and lasting engagement.

4. Data presents opportunity, but use it carefully. Brands need to find a thoughtful way to use social and other consumer data to aid consumers. Initiatives that are off target won't come across as convenient, instead feeling annoying, if not invasive. When it comes to using big data in social marketing, just because you can doesn't mean you should.

Drilling down on what your data says about consumer purchasing behavior can be crucial for cultivating customer loyalty. With the right data tools, brands can monitor what their various target customers shop for, how they research and through what channels they prefer to purchase. This information can then be synthesized to learn what kind of rewards or loyalty campaigns will appeal most to specific audiences.

For example, Apple's iBeacon has received a lot of attention for its powerful specificity and flexibility. If a consumer passes by a store's feature display for a new product, a notification about a special offer or more information about that product pops up on the shopper's smartphone, delivering a highly personalized experience catered to the individual.

5. Use e-gift cards as part of the loyalty and promotional mix. Gift cards, specifically digital or e-gift cards, have tremendous potential as a loyalty tool. E-gift cards can be implemented across online, mobile and even social channels. Variable denomination gift cards, which can be issued in any amount to the penny, make up a strong foundation for a stand-alone or supplementary rewards program.

Promotional e-gift cards, which have an expiration date, are also a great reward tool. Offering loyal customers a $10 gift card when they buy a $25 gift card for a friend, for instance, both thanks them for choosing your brand once and incentivizes them to return again, laying the foundation for building on an already positive relationship. It also aids results in new customer acquisition. In addition, with studies showing more than 70 percent of consumers spending more than their gift card amount, there are also opportunities for increased revenue.

The bottom line is that social and mobile technology has raised the stakes, creating new challenges and opportunities in the loyalty game. There's no better way to acquire a new customer than from a recommendation of an existing customer who is passionate about your brand. No matter the type of brand or industry, the most loyal customers will always be the ones who feel most valued.

Tyler Roye is the co-founder and CEO of eGifter, a web and mobile social gifting app that enables users to send e-gift cards.